Cairene's gauge of the state of the world

Bookmarks 02/22/2012

Even though I’m one of many who believe the United States should stop bankrolling dictatorial governments, these threats won’t be enough to solve the impasse.

It may sound irrational for a client state to play chicken with its benefactor, but from its own perspective SCAF doesn’t really have anything to lose. That’s because SCAF isn’t betting with its own money: it’s betting with Egypt’s finances as well as its international reputation and credibility – but as it has repeatedly shown over the past year, these are things it doesn’t really seem to care about much.

There are, however, a few signs of hope. One of them is that the congressional debate about aid to Egypt may finally help Americans to comprehend the extent to which subsidizing a military dictatorship damages U.S. standing. If that actually comes about, then this whole crisis will not have been in vain.

n any case, the sacking of Radwan changed nothing. He was dropped in a Cabinet reshuffle in July following protests demanding revision of the budget and the raising of the minimum monthly wage to LE1,200 (about US$200). Nevertheless, Radwan’s successor, Hazem Biblawi, pledged from the outset to keep the budget unchanged.

Biblawi, who was deputy prime minister for economic affairs as well as finance minister, also had a clear orientation. He was directly responsible for the government’s decision not to re-nationalize public enterprises that had been sold off corruptly under Mubarak. He insisted that the government contest court rulings that annulled a number of these sales.

Curiously, Ganzouri’s government returned to the path of borrowing. But it promised no new expenditure: it thereby managed to offer a combination of both indebtedness and austerity. It announced it was seeking a loan from the International Monetary Fund (IMF), the very organization which first pushed for privatization and a free market economy – under previous borrowing programs – during Mubarak’s reign.

the Popular Campaign to Drop Egypt’s Debts revealed that Egypt secretly borrowed US$1.2 billion in the past year. The group cited a rise detected by The Economist magazine in Egypt’s foreign debt from US$35 to US$36.2 billion. If an agreement is reached on a US$3.2 billion loan from the IMF, this year’s total external borrowing would end up reaching four times the annual average under Mubarak.

epresentatives from civil society assumed the role of development “experts,” out of a belief that public policies are the job of technical experts with superior academic degrees and activists with expertise in work with local communities of the poor and illiterate.

representatives from civil society assumed the role of development “experts,” out of a belief that public policies are the job of technical experts with superior academic degrees and activists with expertise in work with local communities of the poor and illiterate.

Besides their inability to conceive the major transformations Egypt is undergoing, civil society organizations are also dangerously heedless to the failure of the “state of experts” over more than two decades of authoritative development hegemonized by governmental and international bureaucracies (including the World Bank itself).

ome might ask about the role that the World Bank and its civil society organizations should properly play. The World Bank is a financial institution; its primary role is to lend money and to achieve development. It is an institution that should not exercise politics, even though all of its work is translated into policies — how paradoxical!